Companies in India are hiring more women for better ESG scores

International Women's Day

Gender diversity is becoming increasingly crucial for Indian companies as they aim to boost their environmental, social, and governance (ESG) scores. With the spotlight on sustainability and social responsibility, companies are prioritising inclusive practices to fuel growth and societal advancement.

In this context, initiatives promoting gender diversity are gaining traction across sectors. From rethinking recruitment strategies to ensuring pay equity, organisations are aligning their efforts with broader societal expectations and investor demands.

According to Taruna Saxena, a partner at audit and consulting firm Grant Thornton Bharat, initiatives such as setting diversity targets, creating mentorship programmes for women in leadership roles, and training recruitment teams to remove unconscious bias allow companies to improve their ESG scores.

Saxena said measures such as provisioning flexible hours, especially for women who may have additional caregiving responsibilities, helping restart careers after breaks, and implementing and publicising equal-pay policies demonstrate a commitment to gender equality.

Gender-neutral recruitment, where job descriptions don't inadvertently favour one gender, and investing in leadership development tailored for women to demonstrate a commitment to develop and promote talented women are some of the initiatives that can help companies improve their ESG scores, Saxena added.

Experts said targeted programmes such as mentorship initiatives and bias-free recruitment practices are effective in enhancing ESG performance. Additionally, measures such as flexible work arrangements and support for women returning to work after breaks demonstrate a commitment to equality and talent retention.

Companies are listening

Indian companies are responding to these imperatives. Examples include Titan Company’s diversity efforts and Hindustan Unilever's approach to gender balance across all levels.

P&G India's gender equality programme highlights its dedication to inclusivity. Nidhi Marwah, group MD for South Asia & the UAE at the Executive Centre, noted that beyond ethical considerations, such practices yield tangible benefits, bolstering ESG scores.

Indian companies are more proactively implementing strategies and policies that ensure diversity and female participation in the workforce.

In 2023, Indian companies including Tata Consultancy Services, Wipro, Tech Mahindra, Hero MotoCorp, HCL Technologies, Genpact and Dr Reddy’s Laboratories made it to the Bloomberg Gender-Equality Index (GEI) of 484 global companies. The index serves as a benchmark for companies seeking to track their progress in gender inclusion and how the implementation of diversity policies shapes company performance.

Beyond ethical considerations, the link between gender diversity and ESG scores carries significant financial implications. Companies with robust diversity policies are seen as less risky investments, granting them access to capital on favourable terms. Conversely, organisations lagging in diversity may face higher costs and limited investment opportunities.

"India’s largest publicly traded companies employ three men for every woman in their workforce, indicating a wide, persistent gap despite growing corporate clamour about diversity.  At Titan, we have 29 percent women representation, and it continues to be an area of focus,” said Priya Mathilakath Pillai, head - HR (retail, corporate & manufacturing) at Titan.

Pillai said the company has launched programmes to reduce the gender gap in the workforce such as non-conscious bias programmes, career re-entry support and mentoring for women.

Prioritising meritocracy

“We have programmes to increase representation of women in sales and manufacturing leadership roles. We are not only enabling re-entry of women but also curating unique initiatives to align with the new generation entering the workforce,” she said.

Anuradha Razdan, executive director, HR and CHRO of Unilever South Asia, said Hindustan Unilever aims to be gender-balanced from the boardroom to the frontline by being intentional in its hiring and ensuring balanced slates while prioritising meritocracy. She added that over 46 percent of Unilever's managerial cadre in India are women.

FMCG firm P&G India has rolled out measures to help women in its workforce with equal opportunities. According to Srinivas PM, head – HR at P&G India, the company is dedicated to ensuring equal opportunities for women.

“Our gender equality programme focuses on creating a supportive environment through community-building initiatives like dialogue sessions and lean-in circles. We also actively promote mentoring, sponsorship, leadership skill development, flexibility, and increased representation of women at all levels of leadership,” he said.

Regulatory landscape and policy

The regulatory environment in India has been evolving to promote gender diversity and ESG compliance. The Companies Act, 2013, mandates certain classes of companies to have at least one woman director on their board. Additionally, the market regulator and stock exchanges encourage companies to disclose gender diversity metrics and other ESG-related information.

While policies are in place to ensure better female representation at the top levels of corporate India, women occupy a mere 19 percent of the board seats in the top 200 National Stock Exchange-listed companies in India, according to a December 2023 report by leadership advisory firm Russell Reynolds Associates. These corporations collectively represent over 80 percent of the total market capitalisation of listed companies.

Even as regulatory mandates drive gender diversity disclosures, challenges persist in achieving equitable representation, especially in leadership positions. Nonetheless, the integration of gender diversity into corporate strategies is increasingly recognised as essential for Indian companies, fostering resilience and sustainable growth.

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